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U.S. BANCORP EARNINGS JUMP 19 PERCENT

    PORTLAND, Ore., July 15 /PRNewswire/ -- U.S. Bancorp (NASDAQ: USBC) today released the following:
    Second Quarter 1993 Highlights:
    - Net income up 19 percent from prior year to $63.6 million
    - Nonperforming assets drop to lowest level in 3 years at $269.8 million
    - Average loans increase one percent from first quarter to $13.5 billion
    - Record noninterest revenues totaling $122.2 million
    - Return on assets of 1.24 percent versus 1.14 percent from prior year
    - Return on common equity of 15.81 percent versus 15.28 percent from prior year
    U.S. Bancorp today announced net income of $63.6 million for the second quarter 1993, up 19 percent from $53.3 million reported in the second quarter 1992.  Per share earnings totaled $.61 for the quarter, versus $.54 reported last year.  Net income for the first six months of 1993 totaled $125.1 million, or $1.20 per common share, versus $100.4 million, or $1.02 per common share, earned before accounting changes during the same period in 1992.  Net income for the first six months of 1993 equates to a return on average assets of 1.24 percent and a return on average common equity of 15.82 percent.
    "We are pleased to report another quarter of strong earnings at U.S. Bancorp," stated Roger L. Breezley, chairman and chief executive officer.  "More gratifying, however, are the underlying elements evident in the results which should provide for continued success in the future. Consumer and commercial loans experienced modest growth and credit quality continued to improve.  Our steady reduction in nonperforming assets has helped provide for enhanced margins and has lowered problem loan operating expenses.  We believe these are signs of a gradually improving economy in our markets."
    During the quarter, average loans and leases grew one percent over first quarter 1993 levels, representing the highest quarterly growth rate experienced in over two years.  Average total earning assets grew over two percent while the net interest margin jumped 13 basis points to 5.33 percent, resulting in a 6 percent increase in net interest income. The recent strong net interest margin experienced is expected to continue.
    Nonperforming assets have dropped to their lowest level in three years, now totaling $269.8 million and comprising only 1.97 percent of total loans and other real estate.  Credit loss reserves also continue to strengthen as the allowance for credit losses currently represents 1.92 percent of total loans and leases while providing 108 percent coverage of nonperforming loans.  Loans totaling $58 million previously classified as other real estate owned are now recorded as nonaccrual loans in accordance with recent regulatory guidance.  Coverage of nonperforming loans prior to the reclassification would have been 143 percent.
    Noninterest revenues reached record levels during the second quarter 1993, totaling $122.2 million, an 11 percent increase over $110.2 million reported in the second quarter 1992.  The noninterest revenues represent 34 percent of total revenues.  Record revenues were recorded in service charges, trust and investment administration, ATM fees and brokerage commissions along with strong results in bank cards, credit reporting and insurance.  Mortgage banking revenues dropped due to the writedown of mortgage servicing intangibles as higher rate mortgage loans continue to be refinanced.  These writedowns were offset by gains on the sale of mortgage servicing rights.
    Noninterest expenses totaled $235.5 million compared to $209.2 million recorded in the second quarter 1992.  Included in the second quarter 1993 expenses are the additional operating costs associated with the 49 Security Pacific and Bank of America branches acquired during the third quarter 1992, and nine HomeFed branches acquired in the second quarter 1993.  The efficiency ratio was 64.7 percent as compared to 63.7 percent in the second quarter last year and 65.8 in the first quarter 1993.
    U.S. Bancorp is the largest bank holding company headquartered in the Northwest, with assets of $20.8 billion as of June 30, 1993. U.S. Bancorp is one of the nation's 35 largest bank holding companies, and has consistently ranked among the top tier of these companies in performance and capital strength.  Banking subsidiaries include U.S. Bank of Oregon; U.S. Bank of Washington; U.S. Bank of California; U.S. Bank of Nevada; and U.S. Bank of Idaho.  Other financial services businesses include U.S. Bancorp Mortgage Company; U.S. Bancorp Leasing and Financial; and U.S. Bancorp Securities and Trust Group.
                         U.S. BANCORP
                  CONSOLIDATED BALANCE SHEET
                  U.S. BANCORP AND SUBSIDIARIES
    In thousands, June 30,                        1993          1992
    ASSETS
    Cash and due from banks                   $ 1,127,238   $ 1,032,894
    Interest-bearing deposits with banks            1,127        22,938
    Federal funds sold and security
      resell agreements                           394,016       407,362
    Other short-term investments                    9,874        18,473
    Investment securities                       3,272,975     2,244,918
    Trading account securities                    151,672       178,463
    Loans held for sale                           935,059       516,446
    Loans and lease financing, net of
      unearned income
      Commercial                                6,515,336     6,354,924
      Real estate construction                    753,589       909,676
      Real estate mortgage                      2,659,984     2,862,114
      Consumer                                  2,989,219     2,750,196
      Foreign                                      61,874        48,119
      Lease financing                             723,636       828,350
    Total loans and lease financing            13,703,638    13,753,379
    Allowance for credit losses                  (262,445)     (244,395)
    Net loans and lease financing              13,441,193    13,508,984
    Premises, furniture and equipment             484,025       419,427
    Other real estate and equipment owned          27,824        69,830
    Customers' liability on acceptances           179,999       223,819
    Other assets                                  805,294       640,671
                                              $20,830,296   $19,284,225
    LIABILITIES
    Deposits:
      Noninterest bearing deposits            $ 3,615,148   $ 2,680,975
      Interest bearing demand, money market
        and savings accounts                    6,628,748     5,502,550
      Time deposits                             5,047,137     5,213,484
    Total deposits                             15,291,033    13,397,009
    Federal funds purchased and security
      repurchase agreements                     1,503,163     2,039,179
    Commercial paper                              272,761       213,738
    Other short-term borrowings                   348,486       312,176
    Long-term debt                              1,107,730     1,310,001
    Accrued income taxes                           82,893        46,367
    Acceptances outstanding                       179,999       223,819
    Other liabilities                             330,214       325,259
      Total liabilities                        19,116,279    17,867,548
    SHAREHOLDERS' EQUITY
      Preferred stock                             150,000           ---
      Common stock                                496,655       493,475
      Capital surplus                             383,148       380,516
      Retained earnings                           684,214       542,686
      Total shareholders' equity                1,714,017     1,416,677
                                              $20,830,296   $19,284,225
                  CONSOLIDATED STATEMENT OF INCOME
                   U. S. BANCORP AND SUBSIDIARIES
                (In thousands except per share data)
                               Three Months Ended    Six Months Ended
                                   June 30,               June 30,
                                 1993      1992       1993        1992
    INTEREST INCOME
    Loans and lease financing $291,049  $315,642    $577,592    $638,825
    Loans held for sale         14,645    11,937      25,104      21,755
    Investment securities
      U.S. Treasury
        obligations             13,346     6,830      24,604      13,166
      State and municipal bonds  5,181     5,429      10,667      10,926
      U.S. government agency
        and other securities    34,242    24,710      68,842      46,810
    Trading account securities   2,010     1,807       3,905       3,676
    Money market investments     2,236     4,006       5,958       8,556
    Total interest income      362,709   370,361     716,672     743,714
    INTEREST EXPENSE
    Deposits                    93,338   113,609     191,455     234,837
    Short-term borrowings       14,606    24,697      27,300      51,013
    Long-term debt              21,132    23,213      43,633      46,274
    Total interest expense     129,076   161,519     262,388     332,124
    NET INTEREST INCOME        233,633   208,842     454,284     411,590
    Provision for credit losses 25,421    32,862      46,484      64,963
    Net interest income after
      provision for credit
        losses                 208,212   175,980     407,800     346,627
    NONINTEREST REVENUE
    Service charges on deposit
      accounts                  34,489    29,099      66,706      55,939
    Trust and investment
      administration            13,207    12,496      24,416      22,389
    Bank card revenue           14,430    11,923      26,234      22,440
    Credit reporting revenue     9,434     6,982      16,854      16,352
    Equity investment income     7,199     4,191      14,989       6,906
    Exchange fees                6,872     5,708      12,597      10,727
    Mortgage banking income      9,576    18,374      27,509      37,178
    Securities transactions          3       196           3         307
    Other operating revenue     26,966    21,228      51,803      49,971
    Total noninterest revenue $122,176  $110,197    $241,111    $222,209
    NONINTEREST EXPENSE
    Employee compensation and
      benefits                 115,101   107,003     234,678     214,856
    Net occupancy expense       15,097    13,569      30,184      26,668
    Equipment rentals,
      depreciation and
      maintenance               21,976    17,341      42,915      34,311
    Regulatory agency fees      10,270     8,435      21,322      16,925
    Long-term debt redemption
      expense                      ---       ---         ---       6,668
    Other real estate owned
      expenses                   3,069     5,730       5,196      13,316
    Telecommunications           6,433     5,617      12,848      11,436
    Other operating expense     63,505    51,520     117,297     100,638
    Total noninterest expense  235,451   209,215     464,440     424,818
    Income before income taxes  94,937    76,962     184,471     144,018
    Provision for income taxes  31,378    23,697      59,420      43,661
    Income before cumulative
      effect of accounting
      changes                   63,559    53,265     125,051     100,357
    Cumulative effect of
      accounting changes           ---       ---         ---    (59,890)
    Net income                $ 63,559  $ 53,265    $125,051    $ 40,467
    Amounts applicable to
      common stock
      Income before cumulative
        effect of accounting
        changes               $ 60,512  $ 53,265    $118,957    $100,357
      Net income                60,512    53,265     118,957      40,467
    Average number of common
      shares outstanding        99,298    98,590      99,232      98,473
    Per common share
      Income before cumulative
       effect of accounting
       changes                   $0.61     $0.54       $1.20       $1.02
     Net income                   0.61      0.54        1.20        0.42
     Cash dividends declared      0.22      0.19        0.41        0.38
        CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                   U.S. BANCORP AND SUBSIDIARIES
                          (In thousands)
                                              Six Months Ended June 30,
                                                    1993        1992
    Shareholders' equity at beginning of period   $1,631,308  $1,406,380
    Net income                                       125,051      40,467
    Stock options exercised                            2,675       5,546
    Dividends reinvested and other transactions        1,776       1,740
    Preferred dividends paid and declared             (6,094)        ---
    Common dividends declared                        (40,699)   (37,456)
    Shareholders' equity at end of period         $1,714,017  $1,416,677
                                 Three Months Ended     Six Months Ended
    June 30,                      1993      1992        1993       1992
    (In thousands except per share data)
    Average common shares
      outstanding                99,298     98,590     99,232     98,473
    Earnings per common share:
      Before accounting changes  $ 0.61     $ 0.54     $ 1.20     $ 1.02
      Net income                   0.61       0.54       1.20       0.42
    Book value per common share   15.75      14.35      15.75      14.35
    Risk-based capital (1993
      estimate)
      Tier 1 (pct)                                       8.51       7.50
      Total capital (pct)                               11.55      10.51
    TAX-EQUIVALENT NET INTEREST MARGIN
    Average rate earned on
      interest earning assets(pct) 8.18       9.08       8.21       9.19
    Cost of funds supporting
      earning assets               2.85       3.87       2.94       4.01
    Net interest margin (pct)      5.33       5.21       5.27       5.18
    Tax-equivalent adjustment  $  8,319   $  9,451   $ 16,738   $ 19,314
    Net interest income-fully
      taxable                  $241,952   $218,293   $471,022   $430,904
    (In millions)
    Average loans              $ 13,523   $ 13,690   $ 13,456   $ 13,726
    Average earning assets       18,166     16,793     17,960     16,672
    Average assets               20,626     18,837     20,370     18,740
    Average deposits             15,264     13,371     15,109     13,264
    Average total shareholders'
      equity                      1,685      1,402      1,667      1,379
    Average common equity         1,535      1,402      1,517      1,379
    Allowance for credit losses,
      beginning of period      $256,035   $242,105   $259,155   $230,101
    Provision for credit losses  25,421     32,862     46,484     64,963
    Charge-offs                 (27,946)   (38,541)   (57,402)  (64,131)
    Recoveries                    8,935      7,969     14,208     13,462
      Net charge-offs           (19,011)   (30,572)   (43,194)  (50,669)
    Allowance for credit losses,
      end of period            $262,445   $244,395   $262,445   $244,395
    Nonaccrual loans                                 $239,794   $314,645
    Restructured loans                                  2,229      6,174
    Other real estate and
      equipment owned                                  27,824     69,830
        Total nonperforming assets                   $269,847   $390,649
    Accruing loans past due 90
      days or more                                   $ 18,691   $ 31,445
                                 Three Months Ended     Six Months Ended
    June 30,                      1993      1992        1993       1992
    Ratios:
      Net charge-offs to
        average loans (a) (pct)   0.56      0.90        0.65       0.74
      Allowance for credit losses
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Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Date:Jul 15, 1993
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